Investors haven't been all that enthusiastic about Wright Medical (NASDAQ:WMGI) since its late October announcement of a merger with Tornier (NASDAQ:TRNX)
and an approval letter from the FDA for its Augment biological product.
The shares have fallen almost 20% since then, as I would imagine some
investors who had held Wright Medical in anticipation of a favorable
Augment outcome and/or a bid from a larger med-tech company might have
decided to call it a day.
To be sure, Wright Medical's management
is putting a lot on its plate. Integrating the two businesses is going
to take quite a bit of energy and launching Augment will demand a high
level of sales execution - it has all the hallmarks of a great product,
but it won't sell itself. If Wright Medical can successfully meld the
two businesses, deliver on the multi-hundred million dollar promise of
Augment, and drive greater leverage in manufacturing, sales, and
distribution, a fair value above $40 is possible. If management
stumbles, or if the extremities market slows, the market will not be
forgiving.
Please continue here:
With The Tornier Deal On Track, Wright Medical Will Be Busy
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